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United Launch Alliance (ULA) has enough unsold Delta 2 rockets in inventory to meet NASA's forecasted demand through at least 2015 and could wait until 2012 to decide whether to restart production of the reliable but increasingly expensive workhorse, a top company executive said.

Dan Collins, ULA's chief operating officer, also said the company is considering ways to reduce the Delta 2's price tag as well as developing a less powerful, lower-cost variant of its larger Atlas 5 or Delta 4 rockets. Speaking June 25 here at a meeting of the National Research Council's Space Studies Board, he said ULA of Denver has no intention of ceding the medium-lift launch market it has dominated for decades to new rockets being developed Orbital Sciences Corp. and Space Exploration Technologies (SpaceX).

"There's been a lot of talk about [how] we need to go fill the gap [with] the demise of Delta 2," Collins told the board. "Part of my message for you today is we don't know of any gap. We have Delta 2s in inventory that are unsold. We plan on continuing to sell those. With the change in the requirements that we will see as the [U.S. Air Force Medium Launch Vehicle 3] program goes away, we are adjusting Delta 2 and bringing the price down."

The Air Force has been using the Delta 2 since 1989, primarily to launch GPS navigation satellites. With the last of the current-generation GPS satellites slated to lift off aboard a Delta 2 later this year, ULA's long-running Medium Launch Vehicle contract is coming to an end.

An internal study conducted by NASA in 2007 concluded that Delta 2 launch prices, already hovering in the $80 million range, likely would soar once the Air Force abandons the program in favor of manifesting future generations of GPS satellites aboard ULA's larger Atlas 5 and Delta 4 rockets. NASA has been the other big Delta 2 customer in recent years.

The NASA study, conducted by the agency's in-house rocket buyers, recommended following the Air Force's lead by phasing out Delta 2 and shifting more payloads to Atlas 5 or Delta 4 until a more affordable medium-lift launcher comes along.

While the Air Force has been the anchor customer for Delta 2 since the beginning, Collins said the service's abandonment of the program gives ULA the opportunity to reduce costs without compromising reliability.

"There have been requirements in the government mission set that have driven cost," Collins said, citing as an example the Air Force's insistence that the Delta 2 be kept ready to launch within 40 days of call up.

"That drives significant cost into a program," Collins said. "For instance, it drives having two launch pads at Cape Canaveral. We will not continue to operate two launch pads."

Collins said dropping the 40-day call up requirement also would permit ULA to "significantly lower" the number of people it needs on hand to launch Delta 2.

"So we will see significant changes in the cost structure on the Delta 2 with a significant inventory to continue flying," Collins said. "We plan on being exceptionally competitive in the medium market for the foreseeable future."

ULA has "around half a dozen" unsold Delta 2 rockets on hand, a sufficient inventory, Collins told the board, to meet NASA's scaled-back demand through 2015.

"We don't see any need to guess what the market is going to be in 2016," Collins said, later adding, "When people actually start having programs of record you can start at the time bringing the right vehicle to market."

If by 2012, NASA and other potential customers are forecasting a combined eight to 10 medium launches a year beyond 2015, Collins said, ULA could financially justify restarting Delta 2 production. But if forecasted demand is only four to seven launches annually, Collins said, ULA would be more likely go after that market with a vehicle that combines a new low-cost upper stage with an Atlas 5 or Delta 4 booster core.

Collins said the medium-lift launch market will be extremely competitive for at least the next several years.

"There are six launchers out there trying to split a market of about six launches a year," Collins said. "We're all going to be out trying to make a living in this market and it's going to be difficult."

Collins told the board ULA is determined to stay in the medium market and make Delta 2, or its successor, competitive with the price point Orbital Sciences is shooting for with its planned Taurus 2 rocket.

"We think there's a premium that comes with the experience and reliability record [of Delta 2], but there's only so much that premium can demand, so we need to get down in that same area," Collins said. "Can we get all the way there? I hope so. But if not I think we can get pretty close."

ULA does not disclose Delta 2 pricing, but Collins said NASA pays the company less than what the agency requires its programs to budget for a Delta 2 launch.

Appearing alongside Collins were executives from Orbital Sciences and SpaceX who gave the board updates on their efforts to field Delta 2-class competitors.

Robert T. Richards, vice president of Orbital's Launch Systems Group, said Orbital and its investors are prepared to spend $200 million developing Taurus 2, a medium-class rocket the company expects to launch from Virginia's eastern shore in December 2010 as part of a NASA-funded demonstration. He said Orbital also has hardware in production for a second rocket that could fly a few months earlier if the company finds a customer that needs to launch a medium-sized satellite then.

He said Orbital of Dulles, Va., is aiming to offer Delta 2-class performance at a lower price, or around $65 million a launch.

"There are some edges of the envelope where a Delta 2 Heavy might have a little more performance, but essentially you should think of it as a Delta 2," Richards said.

ULA used a Delta 2 Heavy to loft NASA's Gamma-ray Large Area Telescope into orbit June 11 from from Cape Canaveral Air Force Station, Fla. The 4,230-kilogram spacecraft required a Delta 2 augmented with nine strap-on boosters.

Hawthorne, Calif.-based SpaceX, the rocket start-up created six years ago by PayPal co-founder Elon Musk, aims to price its Falcon 9 rocket significantly below Taurus 2.

SpaceX, like Orbital, is getting financial assistance from NASA under the agency's Commercial Orbital Transportation Services program.

Larry Williams, SpaceX vice president of strategic relations, told the Space Studies Board that the company is offering Falcon 9 launches for $36.75 million to $57.75 million depending on the size of the payload and desired destination.

International Space Station-bound cargo flights involving the company's reusable Dragon capsule, Williams said, will cost between $80 million and $100 million

Williams said SpaceX believes it can deliver on its promise of lower launch prices by taking the "Wal-Mart approach," which he characterized as doing hundreds of things 1 percent cheaper than the competition rather than trying to do one thing 90 percent cheaper.

SpaceX has conducted two launches of the smaller Falcon 1 rocket to date, neither of which succeeded in reaching orbit. A third Falcon 1 launch had been tentatively slated for June, but Williams said that attempt has been pushed off until late July or early August due to "a bit of a range issue" at the Kwajalein missile range, where the company has a launch pad.

The first Falcon 9 rocket is expected to arrive at Cape Canaveral by the end of the year for an early 2009 launch for a U.S. government customer SpaceX says it is not permitted to name.

Source: SPACE.com

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